For the purposes of this discussion, let me start by defining exactly what I mean by the terms marketing niche and affiliate marketing. A marketing niche is nothing more than an opportunity to sell a needed or wanted product or service to a group of customers who want it or need it and who may be having trouble finding it. Putting it another way, its the law of supply and demand working in favor of the marketer. What would a canteen of water be worth to a man struggling across the Sahara desert at high noon and what would that same canteen of water be worth to a drowning sailor? In the first case, we have a robust marketing niche for the water salesman and in the second, we most certainly do not. What we are striving for is high demand for our merchandise with low competition. What we are trying to avoid is the opposite.
Lets examine this in terms of real products. We could sell to the pet products niche (high demand, high competition), the dog collar niche (moderate demand, moderate competition) or the studded dog collar niche (low demand, low competition). None of these markets meet our criteria (high demand, low competition). What if, however, purple, studded poodle collars abruptly became all the rage because a famous style-setter was seen walking her famous poodle with one of these collars around her dogs neck and a matching one around her own neck? Say you just happen to control a warehouse full of purple studded poodle collars and you are the only firm that does. With efficient marketing, you could sell out in an hour and put your progeny through a university with the proceeds!
Now, lets consider the term affiliate marketing. An affiliate marketer sells other peoples products for them for a commission. An affiliate marketer does not work directly for the person who has the right to market the product or service but, rather, as an independent contractor who only gets compensated for producing a successful sale. The affiliate marketer can choose to vend just one type of product (as a specialty) or a broad selection of various kinds of services or products. In either instance, the job of any successful affiliate marketer would have to be to market to a niche or niches that had high demand and low competition. High and low are relative terms and so, in the real world, the marketer may never unearth the perfect niche but always endeavor to be as close to that objective as possible.
The initial thing an affiliate marketer should do is to discover a source of affiliate offerings to sell and then find out which of those products are aimed at the best niches. Best, in this sense, means those niches most closely approach an ideal niche as defined above. To do this, the marketer must first do away with all items that arent selling very well and concentrate, rather, on services or products that demonstrate sufficient, proven sales volume so as to be worth the time, effort and money that it will take the affiliate marketer to sell them profitably. From this list, the smart affiliate marketer then does away with all products that experience a lot of competition. If 100,000 purple studded poodle collars can be found in the world and there are one million marketers trying to sell them, this would no longer be a profitable niche by reason of high competition.
Our example of the thirsty man dragging himself across the desert may not be a profitable niche either, as it turns out, since there is only one customer and he is positioned very far from civilization. Putting it differently, the niche is too little to make money considering that the costs to provide the needed merchandise to that niche are so high. If this is making it appear that niche affiliate marketing is a bit more complicated than you first thought, you are right. Theres more:
The problem with fad items like purple studded poodle collars is that they will 1) soon go out of popularity and 2) that when the word gets out that they are all the rage, every company from here to Timbuktu will soon be making them in sufficient quantities to swamp this solitary, unique, profitable market, thus drowning it with competition. The affiliate marketer must, therefore, seek out items that would appear to have a long lifespan. Toilet paper and dog food would qualify as products with a potentially long lifespan but they would be banned from the list for reason of high competition. All of these problems will rapidly reduce the affiliate marketers list to a handful of products, perhaps no more than 100 to choose from. The good news is that all of these hundred products are at least, potentially, money-makers.
As an Internet affiliate marketer, there are really two, general product categories to consider: 1) physical products that must be wrapped and shipped to the consumer and 2) informational products such as e-books and software that can be delivered straight away over the net at reasonable prices with no delivery or overhead costs. For the purposes of this discussion, Id like to focus on the second kind because of the advantages just stated.
The Internet, at its beginning, was labeled the Information Super-Highway. It was not referred to as the Physical Products Super-highway because, to this day, no one has found out how to push a big box through a system of wires, satellites and fiber-optic cables. So, although you can promote physical products over the Internet, they lack the price-effectiveness and immediate deliverability enjoyed by informational and software products.
While there are multiple web sites where one can identify informational and software products to promote as an affiliate marketer, Id like to focus in on just one of them, as an example. That source is ClickBank.com and I mention it since it presents several distinct advantages to an online affiliate marketer. The most significant advantage of these is the capacity to detect which of the thousands of items listed there are the best sellers. The best tool for this is a figure provided by ClickBank for every product called gravity which is a quantifiable, ever-changing number representing the amount of recent sales. The higher the amount, the higher the sales. The obvious knee-jerk reaction is that an affiliate marketer should only sell those offerings with the highest gravity but that plan fails to take into account the fact that everybody and his brother (or sister) is going to be out there trying to sell those obvious winners. It is also usually true that products at the very apex of the gravity listing may just be having their moment in the sun of popularity: Here today, gone tomorrow.
Gravity can run from a low of zero to a high of around 1000. To keep away from the competition, I like to promote items that show a gravity number no lower than 10 and no higher than 200. These are relative figures, so if I find an ideal product with a gravity of 215, I am definitely not going to ignore it. Using this plan, I have identified a listing of promising affiliate products to promote that are selling quite well and may not have as much competition as products at the top of the list. My process of elimination is not over yet, though. I am still required to find the ideal keywords for those products to use in advertising them. It turns out that each keyword is, in itself, representative of a niche. For example, the keyword phrase pet supplies would represent a huge niche with a lot of competition while purple studded poodle collars (a so-called long-tail keyword) would probably represent a small niche with far less competition.
So, your final job, then, in the selection process is to get hold of keywords that represent niches with low competition and high demand. Using a keyword research tool you can detect which keywords have the largest number of recent searches (highest demand) and, by utilizing a standard Google search using each of these keywords, one by one, you can determine the number of competing pages that exist for each particular keyword. Youll find that total right under the Google search box. As an arbitrary figure, I like to see less than 5 million competing pages across the Internet for any keyword. Good luck on your prospecting for the ideal affiliate product to sell to the perfect niche!